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Changes in Monetary Policy Assume that the Bank of Ecoville has the following balance sheet and the Fed has a 10% reserve requirement in place: Balance Sheet for Ecoville International Bank ASSETS LIABILITIES Cash $33,000 Demand Deposits $99,000 Loans   66,000     Now assume that the Fed lowers the reserve requirement to 8%. What is the maximum amount of new loans that this bank […]

Changes in Monetary Policy Assume that the Bank of Ecoville has the following balance sheet and the Fed has a 10% reserve requirement in place: Balance Sheet for Ecoville International Bank ASSETS LIABILITIES Cash $33,000 Demand Deposits $99,000 Loans   66,000     Now assume that the Fed lowers the reserve requirement to 8%. What is the maximum amount of new loans that this bank […]

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